Covalon Technologies Ltd (CVALF) Q2 2025 Earnings Call Highlights: Strong Revenue Growth and ...
Revenue Growth: Strong revenue growth relative to prior periods, with sequential quarterly growth expected in Q3 and the second half of the year.
Vascular Access and Surgical Consumables Sales Growth: More than 40% year-to-date growth over last year.
Gross Margin: Performance in the 55% to 60% range, slightly lower in Q2 due to geographic revenue mix.
Profitability: Positive adjusted EBIT in Q2, marking the fifth consecutive quarter of profitability.
Cash Position: Over $18 million in cash on hand, an increase of about $11 million from a year ago.
US Product Revenue Growth: Over 30% growth in the US product revenue category over three years.
Top 50 US Hospital Customers: 100% retention and 38% revenue growth from the same group of top 50 hospitals from 2024.
New Hospital Accounts: Added 29 new hospital accounts in Q2, totaling 50 new hospitals in the first half of the year.
Warning! GuruFocus has detected 6 Warning Signs with BMO.
Release Date: May 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Covalon Technologies Ltd (CVALF) reported strong revenue growth in its vascular access and surgical consumables and international sales channels, with both up more than 40% year-to-date compared to last year.
The company has maintained a disciplined approach to spending, achieving its fifth consecutive quarter of profitability with positive adjusted EBIT.
Covalon Technologies Ltd (CVALF) has a robust cash position with over $18 million in cash and zero debt, providing significant flexibility for growth and shareholder value initiatives.
The company has successfully retained 100% of its top 50 US hospital customers, demonstrating the stickiness of its business and the quality of its products.
Covalon Technologies Ltd (CVALF) has engaged Origin Merchant Partners to explore opportunities for mergers, acquisitions, and partnerships to maximize shareholder value and expand the reach of its technology.
The company's gross margin was slightly lower this quarter due to a higher geographic mix of revenue from its international sales channel, which has a lower gross margin than the US sales channels.
Covalon Technologies Ltd (CVALF) experienced a softer quarter in its US Advanced wound care sales channel, impacting overall revenue growth.
The company has not yet executed a share buyback program, despite discussions with the board and Origin Merchant Partners.
Covalon Technologies Ltd (CVALF) does not currently provide quarterly guidance, citing the stage of the company and the predictability of its revenue.
The company's adjusted EBITDA for the trailing 12 months has decreased, attributed to the softer performance in the US Advanced wound care channel.
Q: Given the company's $18 million cash position and low valuation, is there a plan for share buybacks? A: Brent Ashton, CEO: Our cash position provides flexibility for growth and shareholder value initiatives, including potential share buybacks. This is under discussion with our board and Origin, but no action has been taken yet.
Q: When will Covalon provide quarterly guidance, considering the goal of doubling the share price annually for five years? A: Brent Ashton, CEO: We are confident in our growth potential but are not issuing guidance due to the current stage of our company and revenue predictability.
Q: What caused the erosion in gross profit as a percentage of sales? A: Brent Ashton, CEO: The shift in revenue mix, with a higher percentage from our international business, which has lower gross margins, affected the overall gross profit. We expect margins to rebound.
Q: Can you explain the drop in adjusted EBITDA for the trailing 12 months? A: Brent Ashton, CEO: The drop is due to a softer quarter in the US Advanced wound care channel. We anticipate sequential quarterly growth in Q3 and a stronger second half of the year.
Q: What is the future outlook for the international sales channel, and will US sales channel growth improve gross margins? A: Brent Ashton, CEO: We expect gross margins to improve as US sales pick up. The international sales channel is a strong growth driver, and we are expanding product offerings and entering new countries.
Q: What is Covalon's M&A strategy, and are there specific geographic focuses? A: Brent Ashton, CEO: We are actively exploring opportunities with Origin, focusing on North America but open to global prospects. Specific targets are not disclosed due to the ongoing process.
Q: How many US sales reps does Covalon have, and what are the future plans? A: Brent Ashton, CEO: We have one open position for the West Coast and will continue to refine our model responsibly to support growth without inflating costs.
Q: How does EBITDA margin on international sales compare to the US? A: Brent Ashton, CEO: We report EBITDA at the company level. International gross margins are lower than US margins, but the selling model differs, affecting the EBITDA profile.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New York Times
17 minutes ago
- New York Times
‘Golden Share' in U.S. Steel Gives Trump Extraordinary Control
To save its takeover of U.S. Steel, Japan's Nippon Steel agreed to an unusual arrangement, granting the White House a 'golden share' that gives the government an extraordinary amount of influence over a U.S. company. New details of the agreement show that the structure would give President Trump and his successors a permanent stake in U.S. Steel, significant sway over its board and veto power over a wide array of company actions, an arrangement that could change the nature of foreign investment in the United States. The terms of the arrangement were hammered out in meetings that went late into the night on Wednesday and Thursday, according to two people familiar with the details. Representatives from Nippon Steel — which had been trying to acquire the struggling U.S. Steel since December 2023, but had been blocked by the Biden administration over national security concerns — came around to Mr. Trump's desire to take a stake that would give the U.S. government significant control over the company's actions. Nippon had argued that this influence should expire — perhaps after three or four years, the duration of the Trump administration. But in the meetings, which were held at the Commerce Department, Trump officials led by Commerce Secretary Howard Lutnick insisted that the golden share should last in perpetuity, the two people said. Under the terms of the national security pact, which the companies said they signed Friday, the U.S. government would retain a single share of preferred stock, called class G — as in gold. And U.S. Steel's charter will list nearly a dozen activities the company cannot undertake without the approval of the American president or someone he designates in his stead. Want all of The Times? Subscribe.
Yahoo
20 minutes ago
- Yahoo
5 of the Richest People in Real Estate
Real estate can become a strategic investment option if you know what you're doing and are willing to put in some work. While you might not make several million dollars, it can be another way to boost your bank account and wealth. Read Next: Find Out: Speaking of wealth, real estate has paid off extremely well for some investors and managers around the U.S. and beyond. Here's a look at five of the richest people in real estate. Also see what the 10 richest billionaires did with their first $1 million. Total net worth: $18.7 billion You may not be familiar with Kushal Pal Singh, but he's one of the richest billionaires in the real estate industry. He's the chairman emeritus of a leading real estate company in India called DLF. According to Forbes, the company is the biggest listed property firm by market cap in India. Check Out: Total net worth: $19.7 billion Harry Triguboff is the owner of Meriton, an apartment tower development company in Australia. He's a billionaire real estate developer — and one of the richest people in Australia. According to Forbes, he has built over 79,000 apartments and was a trailblazer, being one of the first developers see potential in apartments rather than single-family homes. Late last year, Medium called him 'the GOAT' of real estate in Australia. Total net worth: $18.9 billion Donald Bren is a big name in real estate in America. He's the chairman of Irvine Company, which, according to Sunrise Capital, has more than 120 million square feet of office space, apartments and malls across California. Per Forbes, he also owns the MetLife Building in New York. Total net worth: $18.4 billion Stephen Ross may have come from humble beginnings, but he's now one of the richest names in real estate. Ross is the CEO and chairman of Related Ross and the owner of the Miami Dolphins. Due to his real estate work, he's especially well known in Florida. According to the company's website, it has many types of properties, including office space, hotels and city centers. Total net worth: $13.2 billion Until 2015, Peter Woo was the chairman of Wheelock & Co., a property developer, and the subsidiary Wharf Holdings, per Forbes. In addition to real estate, the companies are involved in retailing and telecommunications. Editor's note: Net worth figures were sourced from Forbes. More From GOBankingRates How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on 5 of the Richest People in Real Estate Sign in to access your portfolio
Wall Street Journal
25 minutes ago
- Wall Street Journal
Leonard Lauder, Who Turned His Mother's Beauty Business Into a Global Empire, Dies at 92
Leonard Lauder, the eldest son of beauty pioneer Estée Lauder who grew up typing invoices for the family business he would later transform into a global empire, died Saturday at the age of 92, the company said. In five decades at Estée Lauder, including a 17-year tenure as chief executive, Lauder secured prime spots in every major U.S. department store and built a portfolio of beauty's biggest names, including Bobbi Brown, Aveda and MAC.
